US Federal Reserve chair Jerome Powell has nodded to a possible rate cut at the central bank’s September meeting.However, Powell stopped short of committing to cutting rates next months during a speech to policymakers and economists at the Fed’s annual Jackson Hole conference.He acknowledged the tight rope that policymakers have to walk at a time of potential risks for the US jobs market, while there is the possibility that inflation moves higher.Powell said:The stability of the unemployment rate and other labour market measures allows us to proceed carefully as we consider changes to our policy stance.Nonetheless, with policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance.

The Federal Reserve, the US central bank, is gearing up to restart interest rate cuts, its chair Jerome Powell signalled in a closely-watched speech.Powell has come under intense political pressure from Donald Trump in recent months and has defied the US president’s calls to resign, calling the independence of the Fed into question.He warned that the US economy was facing a “challenging situation” and said Trump’s tariffs and immigration crackdown were knocking the global economy and the US labour market.You can read the full story here:Stock markets rallied on the suggestion of future rate cuts, while the yields on US government bonds fell, and the dollar moved lower.In the UK, the government is to cover pay and unpaid pension contributions for workers at the UK’s third-largest steelworks, in South Yorkshire, which collapsed on Thursday.

Liberty Steel’s main British business, Speciality Steel UK (SSUK), was put into administration yesterday after a high court judge ruled that it was insolvent and that its owner, the metals tycoon Sanjeev Gupta, had no prospects of repaying debts of several hundred million pounds.The full story is here:A row between UK health secretary Wes Streeting and pharmaceutical companies has intensified after drugmakers rejected the government’s latest offer on NHS drug pricing.The two sides failed to reach agreement by a midday deadline on Friday, meaning the mechanism under which the health service claws back some of the money it pays for medicines will continue at a rate the industry said was “unsustainable” and could ultimately disadvantage patients.The industry body, the Association of the British Pharmaceutical Industry (ABPI), said the stalemate could mean companies launch fewer medicines in the UK, which could ultimately disadvantage patients.Our other main stories today:Many thanks for reading the blog this week.

Wishing you all a pleasant weekend, and an enjoyable August bank holiday to readers in England and Wales – JPThere’s been some marked market reaction to US Fed chair Jerome Powell’s closely-watched Jackson Hole speech.US stock markets rallied in response to Powell’s speech, where he pointed to a possible rate cut at the central bank’s September meeting but also said the US economy was facing a “challenging situation”.Powell’s speeches have often moved markets in the past and this, expected to be his last as Fed chair, was no exception.Share markets rallied in response, while yields on US government bonds and the dollar fell.The S&P 500 rose by about 1.

6% following Powell’s remarks, while the Nasdaq Composite climbed by almost 2%,The Dow Jones Industrial Average rose 2% to a record intraday high,The suggestion of rate cuts to come was welcomed, with yields falling on US Treasuries,The rate-sensitive two-year Treasury yield fell nearly 10 basis points to 3,69% immediately after the speech, while the benchmark 10-year yields fell 6 basis points to 4.

27%.The US dollar also weakened against a basket of currencies, including the euro and the Japanese yen.Chris Beauchamp, chief market analyst at trading platform IG, said:Stocks have surged in the wake of [Powell’s] speech, with the S&P 500 clawing back almost all the losses this week and indices in both the US and Europe firmly in positive territory.Worries about higher inflation have been cast aside for now, as investors look forward to the US economy powering ahead in the autumn.”Signalling that the US Federal Reserve could restart interest rate cuts, its chair Jerome Powell said the US economy had “faced new challenges” over the past year.

Focusing on inflation - Powell said Trump’s tariffs had “begun to push up prices in some categories of goods”,He added he expected the effects of tariffs to “accumulate over the coming months, with high uncertainty about timing and amounts,”Powell also said: “Tighter immigration policy has led to an abrupt slowdown in labour force growth,”Some of the changes to tax, spending and regulatory policies brought in by the Trump White House could also have “important implications for economic growth and productivity,” he said,Changes in trade and immigration policies are affecting both demand and supply.

In this environment, distinguishing cyclical developments from trend, or structural, developments is difficult.Powell’s speech did not mention the political pressure he, and the Fed, have been under in recent months, after Trump repeatedly threatened to fire him, which has raised questions over the independence of the central bank.Instead, he repeatedly mentioned the central bank’s mandate “to foster maximum employment and stable prices for the American people” and said the Fed remained “fully committed to fulfilling our statutory mandate”.US Federal Reserve chair Jerome Powell has nodded to a possible rate cut at the central bank’s September meeting.However, Powell stopped short of committing to cutting rates next months during a speech to policymakers and economists at the Fed’s annual Jackson Hole conference.

He acknowledged the tight rope that policymakers have to walk at a time of potential risks for the US jobs market, while there is the possibility that inflation moves higher,Powell said:The stability of the unemployment rate and other labour market measures allows us to proceed carefully as we consider changes to our policy stance,Nonetheless, with policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance,The countdown is now on, with US Fed chair Jerome Powell set to deliver his keynote speech at the Jackson Hole symposium in about 35min,The central banker is due to begin his address around 3pm BST in the Wyoming resort, which has become the Davos for central bankers.

Powell’s speech is expected to address the economic outlook, and investors around the world will be on tenterhooks for any hints of whether a fresh rate cut is coming next month.It is expected to be Powell’s last speech in his post, with Trump having said for months that he does not intend to reappoint Powell to the top of the Federal Reserve.There are fears, though, that his final address will be overshadowed by the political pressures coming from the White House.That includes the US president’s controversial call for a Fed governor, Lisa Cook, to resign.It comes after one of Trump’s allies, the US Federal Housing Finance Agency head, Bill Pulte, alleged that Cook had committed mortgage fraud.

Cook said she had “no intention of being bullied” into stepping down.Stay tuned.That’s the opening bell stateside, with US stocks in positive territory at the start of trading:Dow rose 0.57% to 45,039 pointsS&P rose.27% to 6,387 pointsNasdaq was nearly flat but rose 0.

07% to 21,114 pointsUS futures are pointing to a positive start on Wall Street ahead of Powell’s much-anticipated address at Jackson Hole:Dow futures are up 0.3%S&P futures are up 0.2%Nasdaq futures are up 0.15%A row between pharmaceutical companies and Wes Streeting has intensified after drugmakers rejected the health secretary’s latest offer on the NHS drug pricing rebate scheme.Talks broke up without agreement on Friday, meaning the scheme under which the health service claws back some of the money it pays for medicines will continue at a rate the industry has described as “unsustainable”.

At the heart of the dispute is the voluntary scheme for branded medicines pricing, access and growth (VPAG), under which the sector agrees the amount of revenues from drug sales to the NHS they have to pay back.The two sides have been in acrimonious negotiations for months after the rate unexpectedly raised last December by the government to 22.9% for 2025 for newer medicines.It is understood that Streeting had made an ultimatum that if the industry did not accept his latest “generous” offer on pricing then the current mechanism would “continue to have effect unamended” and on Friday the Department for Health and Social Care (DHSC) announced there had been no agreement.The pharma industry said the impasse could mean companies launch fewer medicines in the UK and would discourage them from making investments in the country, ultimately disadvantaging patients.

A government spokesperson said on Friday:This was an unprecedented offer which would increase net spending on medicines by around £1bn over the next three years with billions more expected over the next decade.It is regrettable that following weeks of delay, ABPI members are unwilling to take our proposals to a board vote.We have therefore determined that the interests of patients and the NHS are best served by concluding the review and continuing with the existing VPAG scheme unamended, while continuing to support the UK’s world leading life sciences sector through investment, innovation and reform as set out in our Life Sciences Sector Plan and 10 Year Health Plan.There’s been a further rise in WH Smith shares, which are now up by 7%, suggesting some bargain hunters are prepared to buy shares from their 12-year low.But Dan Coatsworth, investment analyst at AJ Bell, says there are currently more questions than answers about the retailer’s accounting mistake.

Bargain hunters might now be prepared to buy WH Smith following its accounting warning given the shares fell to a 12-year low.However, there are more questions than answers following its shock warning.Principally, does the accounting issue mean investors can no longer trust historic profits for its US arm, and has the company made other accounting errors?Coatsworth said there is also a chance the drop was exacerbated by short sellers:The other area to watch is the amount of stock on loan as that can illustrate if the stock is being heavily shorted or not.Short sellers bet against a company and stand to profit from a falling share price.Prior to this week’s profit warning, 1.

27% of WH Smith’s stock was on loan, according to data from the FCA,This was split across Citadel Advisors and GLG Partners,The market will be watching the FCA’s short-selling data over the coming days to see if additional names are betting against WH Smith in the belief there is more bad news to come,Usually a 5,5% jump in WH Smith shares would be nothing to sniff at, but given the 42% plunge in shares yesterday, it’s likely to be nothing but a dead cat bounce.

Almost £600m was wiped off the market value of WH Smith on Thursday after the retailer cut financial forecasts and launched an independent review following the discovered an accounting blunder at its North American arm.Shares plunged 42% on Thursday after investors took fright at the news, which meant that profits at the division had likely been overstated by £30m.The 5.5% rise on Friday is likely to be a dead cat bounce, in which a spectacular decline in share price is immediately followed by a moderate and temporary rise before they continue their decline.(The gruesome phrase refers to the fact that, while a dead cat will bounce if you drop it from a high building, that doesn’t mean it’s alive.

)